Retos Cartera, the consortium bidding €941m for Spanish publishing group Recoletos Grupo de Comunicacion, has recruited Providence Equity Partners as its largest shareholder. Providence will acquire a 25.5% stake in Retos, a group that also includes Financial Retos Partners, Caja Navarra and Banco Espanol de Credito.
Retos said it had shareholder funds worth €400m after the incorporation of a group of new investors. Financial Retos Partners, which comprises more than 40 private investors, controls 23.18% of the consortium as the second largest shareholder.
Providence was not the only private equity firm interested in Recoletos. Apax, Blackstone and Permira have also studied the company.
London-based Pearson, the media group that owns 79% of Recoletos, has accepted the bid and management has endorsed the offer. Spain’s stock market regulator extended the acceptance period for the €7.2 per share bid to April 1 from March 16.
The group of executives that led the previous MBO of Recoletos will remain with the firm and have taken a circa 12% shareholding in Retos Cartera. They are headed by executive chairman Jaime Castellanos. “We are confident that Providence Equity Partners will add significant value to Recoletos, capitalising on its media and communications expertise,” Castellanos said in a statement.
The consortium is planning to delist Recoletos at a later stage. Recoletos is a Spanish media group with a focus on newspapers, publishing sports daily Marca and Expansion, a business newspaper.
Providence Equity Partners, which has invested previously in Eircom and Kabel Deutschland, is investing from its US$4.25bn fifth fund, which closed last year. With regard to Recoletos, it was advised by Calyon Corporate and Investment Bank and received legal advice from Linklaters.